Global commercial property advisors CB Richard Ellis (CBRE) and UK property agent Savills have each released reports detailing the commercial property movement they have witnessed in April.
CBRE’s data shows a slowdown in the Central London offices market. Take-up was at its lowest level since February 2009; City and Midtown markets registered falls of 62% and 90% and total take-up was 391,500 sq ft. On a rolling six-month average basis, City and West End take-up continued to fall, by 5% overall. Demand registered its first fall in six months, down to 10.7m sq ft, while under offers rose to 2.3m sq ft. However, all commercial property markets did show an increase in space under offer, apart from the West End and Docklands.
Total supply rose slightly by 6.3% to 13.7m sq ft, although new space decreased 2% to 4.7m sq ft. City and West End availability remained static and the report finds supply remaining on a downward trend.
The largest available unit is Cannon Place, weighing in at 389,000 sq ft. There are four other available units of more than 300,000 sq ft and seventeen above 100,000 sq ft.
Large deals were infrequent; the 47,200 sq ft Hays Recruitment deal was the largest of just four completed above 20,000 sq ft over the period. West End way, the 26,200 sq ft Rio Tinto transaction was the biggest.
CBRE expect the market to heat up towards the end of the year and pre-letting to become more prevalent.
Savills’ research reveals a growth in commercial property projects during April, albeit below the long-term average. The private sector was the driver of this growth, while the public sector stayed in the passenger seat, registering a decrease in activity. Overall, private sector new build rose, following eight months of contraction.
The research analysed the outlook of commercial property developers, tracking a ‘weak degree of optimism’ with pessimists citing ‘tight credit conditions and a difficult business environment’.
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